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Sustainability 2016, 8(8), 826; doi:10.3390/su8080826

Impact of Carbon Quota Allocation Mechanism on Emissions Trading: An Agent-Based Simulation

1
School of Information and Safety Engineering, Zhongnan University of Economics and Law, Wuhan 430073, China
2
Economics and Management School, Wuhan University, Wuhan 430072, China
*
Author to whom correspondence should be addressed.
Academic Editor: Samuel Fankhauser
Received: 27 May 2016 / Revised: 30 July 2016 / Accepted: 11 August 2016 / Published: 22 August 2016
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [843 KB, uploaded 22 August 2016]   |  

Abstract

This paper establishes an agent-based simulation system of the carbon emissions trading in accordance with the complex feature of the trading process. This system analyzes the impact of the carbon quota allocation mechanism on emissions trading for three different aspects including the amount of emissions reduction, the economic effect on the emitters, and the emissions reduction cost. Based on the data of the carbon emissions of different industries in China, several simulations were made. The results indicate that the emissions trading policy can effectively reduce carbon emissions in a perfectly competitive market. Moreover, by comparing separate quota allocation mechanisms, we obtain the result that the scheme with a small extent quota decrease in a comprehensive allocation mechanism can minimize the unit carbon emission cost. Implementing this scheme can also achieve minimal effects of carbon emissions limitation on the economy on the basis that the environment is not destroyed. However, excessive quota decrease cannot promote the emitters to reduce emission. Taking into account that several developing countries have the dual task of limiting carbon emissions and developing the economy, it is necessary to adopt a comprehensive allocation mechanism of the carbon quota and increase the initial proportion of free allocation. View Full-Text
Keywords: environment safety; carbon trading; quota allocation; carbon emission; agent-based simulation environment safety; carbon trading; quota allocation; carbon emission; agent-based simulation
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Jiang, W.; Liu, J.; Liu, X. Impact of Carbon Quota Allocation Mechanism on Emissions Trading: An Agent-Based Simulation. Sustainability 2016, 8, 826.

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